Base Currency

AAA

DEFINITION of 'Base Currency'

The first currency quoted in a currency pair on forex. It is also typically considered the domestic currency or accounting currency. For accounting purposes, a firm may use the base currency to represent all profits and losses.

It is sometimes referred to as the "primary currency".

INVESTOPEDIA EXPLAINS 'Base Currency'

For example, if you were looking at the CAD/USD currency pair, the Canadian dollar would be the base currency and the U.S. dollar would be the quote currency. The price represents how much of the quote currency is needed for you to get one unit of the base currency.

RELATED TERMS
  1. Exchange Rate

    The price of a nation’s currency in terms of another currency. ...
  2. Right Hand Side - RHS

    The ask or offer price of a foreign exchange rate. A quote for ...
  3. Counter Currency

    The currency used as the reference or second currency in a currency ...
  4. Major Pairs

    The four forex pairs which are considered to be the most heavily ...
  5. Forex - FX

    The market in which currencies are traded. The forex market is ...
  6. Quote Currency

    The second currency quoted in a currency pair in forex. In a ...
Related Articles
  1. A Primer On The Forex Market
    Options & Futures

    A Primer On The Forex Market

  2. Trading GDP Like A Currency Trader
    Forex Education

    Trading GDP Like A Currency Trader

  3. Currency Exchange: Floating Rate Vs. ...
    Forex Education

    Currency Exchange: Floating Rate Vs. ...

  4. How do you make money trading money?
    Forex

    How do you make money trading money?

comments powered by Disqus
Hot Definitions
  1. Correlation

    In the world of finance, a statistical measure of how two securities move in relation to each other. Correlations are used ...
  2. Letter Of Credit

    A letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. ...
  3. Due Diligence - DD

    1. An investigation or audit of a potential investment. Due diligence serves to confirm all material facts in regards to ...
  4. Certificate Of Deposit - CD

    A savings certificate entitling the bearer to receive interest. A CD bears a maturity date, a specified fixed interest rate ...
  5. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  6. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
Trading Center